SBV devalues dong by another 1%
SBV devalues dong by another 1%
The State Bank of Viet Nam unexpectedly devalued the dong by another one per cent this morning, its third currency depreciation this year.
The monetary authority reduced the reference rate, or the interbank exchange rate, from VND21,673 to VND21,890 per American dollar, while expanding the trading band from plus or minus two per cent to three per cent.
With the new band, the dollar will now be traded between VND22,547 and VND21,233.
The changes have been made with immediate effect, the central bank said in a statement this morning.
The devaluation is the third since early this year, totalling a cumulative three per cent. It came just a week after the central bank widened the currency's trading band from one per cent to two per cent on August 12, to counter China's surprise yuan devaluation.
"After the strong depreciation of the yuan, the domestic market sentiment is still largely concerned about the impact of the imminent American Federal Reserve's rate increase," the central bank's statement said.
It said these adjustments were aimed to proactively lead the market and pre-empt any negative impact of a possible Fed Reserve rate increase.
Commercial banks promptly responded to the central bank's decision and put up new rates this morning.
Eximbank, BIDV and Asia Commercial Bank posted the highest selling rate of VND22,480 per dollar.
Vietinbank, the country's largest lender in terms of asset value, estimated at $30.9 billion, quoted the ceiling rate at VND22,450, while Vietcombank was selling the dollar for VND22,400.
Sacombank quoted the lowest rate at VND22,360 per dollar at 8.47am.
The exchange rate is expected to be volatile today before it stabilises at a new level.
